Headline inflation rates in the Philippines, all items
LOWER food prices caused inflation to ease in November after four straight months of picking up, the government said yesterday. Read the full story.
Nation at a Glance — (12/06/17)
News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.
Fancy a scholarship in France? Check this out
It’s hard not to fall in love in and with Paris, the City of Love acclaimed by poets and romantics everywhere. A scholarship program gives the chance for potential students to find this love—only as a bonus to the love for learning stoked by the opportunities it offers.
The Embassy of France to the Philippines is offering Filipinos a chance to pursue their graduate studies in France through the PhilFrance Scholarship Program.
Coinciding with the 70th anniversary celebration of French‑Philippine diplomatic relations in 2017, the French Embassy launched the program for Filipinos to develop their expertise in the French language and literature, business, public policy and governance, engineering, mathematics, marine biology, applied chemistry, environmental and ecological sciences, and public health.
There are two separate calls for applications under the PhilFrance Scholarship Program for the academic year 2018‑2019.
The first call is directed to Filipino students and professionals wishing to come to France to pursue Master’s or Doctoral programs in all fields of study. The PhilFrance Scholarships are awarded to highly qualified candidates who have demonstrated strong academic and leadership qualities in their scholarly and professional activities. The scholarship benefits include a partial tuition subsidy, a monthly allowance, and a health care package for the expected length of their academic programs.
The second call is launched within the framework of a cooperation agreement signed between the Embassy of France and the Commission on Higher Education (CHED) in January 2017. The CHED‑PhilFrance Scholarships are open to the faculty and staff of CHED‑recognized institutions who wish to pursue Master’s or Doctoral programs in all disciplines at French higher education institutions. The benefits for selected candidates include round‑trip travel expenses, a monthly allowance, waived registration fees for state‑regulated programs at public institutions, and a health care package.
Through a cooperation agreement signed by CHED and Sciences Po, a world‑renowned French institution in the social sciences, full tuition fees for Sciences Po’s graduate programs will be financed as well, on top of the all the other benefits offered by the CHED‑PhilFrance Scholarships.
Complete information on eligibility, application requirements, and awardees’ benefits is available through the PhilFrance Scholarship Program website: www.philfrance-scholarships.com. Interested candidates must submit their applications online by April 13, 2018.
Gov’t raises P255B from retail T-bonds
THE GOVERNMENT has raised some P255.4 billion from its second sale this year of retail Treasury bonds (RTBs), the Treasury bureau said in a statement on Monday, noting that “strong public demand led the RTBs to be oversubscribed multiple times.”
The Treasury had initially set its offer at P30 billion.
It issued P181 billion worth of RTBs on March 28-April 6 in 2017’s first sale of these debt papers.
In its statement yesterday, the Treasury said it issued P125.4 billion worth of five-year RTBs during the Nov. 20-27 public offer period, in addition to the P130 billion issued in the auction on the first day. These RTBs carry a 4.625% coupon and will mature in 2022.
Citing strong demand, the Treasury cut short the RTB public offer two days ahead of the original Nov. 29 end date.
“The overwhelmingly positive response from the public shows that an increasing number of Filipinos are saving and investing, as well as considering the long-term benefits of investments for themselves and their loved ones,” the same statement quoted National Treasurer Rosalia V. de Leon as saying.
The Treasury added that the timing of the sale enabled it to tap “the added liquidity in the market ahead of the Christmas season.”
“The benefits of RTBs are multifold: these instruments help achieve financial stability for individuals and families, and, at the same time, allow ordinary Filipinos to profoundly contribute to nation-building,” Ms. De Leon added.
The government hired state-run Land Bank of the Philippines and Development Bank of the Philippines as joint lead issue managers for the 20th RTB offer, while BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp. and SB Capital Investment Corp. acted as joint issue managers.
After this, the government also has plans to tap the offshore market next year, involving some $200 million worth of yuan-denominated “panda” bonds and $1 billion worth of dollar-denominated global bonds. Finance Secretary Carlos G. Dominguez III said on Wednesday the offshore offerings can be expected to take place some time next quarter.
The government is seeking various ways to help finance its aggressive P8.44-trillion infrastructure development program until 2022, when President Rodrigo R. Duterte ends his six-year term.
Besides running after big-time tax cheats — who Mr. Dominguez believes could each add P20-30 billion to state coffers — the government is also pursuing a four- to five-part overhaul of its tax system, the first of which is in the homestretch to enactment. The first package is expected to yield P100-130 billion in the first year of implementation.
With the success of the second RTB sale, one trader said “they (the government) already reached their goal.”
“With the next two auctions worth P40 billion, they can already reject bids which are too high for them,” the trader said.
Aside from the bond auction scheduled today, the Treasury plans to conduct two more auctions on Dec. 11 and 19 with offers cumulatively worth P40 billion. — Karl Angelo N. Vidal
PHL leads SE Asian factory activity for 2nd month
THE PHILIPPINE manufacturing sector led peers in the Association of Southeast Asian Nations (ASEAN) in terms of improved business conditions for the second straight month in November, according to a survey conducted by IHS Markit for Nikkei, Inc.
The Nikkei ASEAN Manufacturing Purchasing Managers’ Index (PMI) showed that, at 54.8, the Philippines’ PMI bested the six other ASEAN economies covered and the region’s own 50.8 reading that represented a “marginal” improvement from October’s 50.4, even if that was its best performance since April.
Only Singapore bared a deterioration in November at 47.4 (from October’s 51.3) — below the 50.0 mark that separates readings above that point that denote improvement from the preceding month from those below it that reflect worse conditions.
The Nikkei Philippines Manufacturing PMI, released to journalists on Friday last week, showed the country’s reading at its highest in 11 months in November, lifted by expansion in output, new orders and employment.
The headline PMI is a composite indicator derived from responses to survey questions on new orders (with a 30% weight), output (25%), employment (20%), suppliers’ delivery times (15%) and inventories of inputs (10%) in order to provide a broad picture of the health of the manufacturing sector in a given month.
“The ASEAN (Association of Southeast Asian Nations) manufacturing economy looks set to finish the final quarter of 2017 with one of its strongest quarterly performances for over three years,” the regional report quoted Bernard Aw, IHS Markit principal economist, as saying.
“The survey’s sub-indices also showed signs that the upturn will gain momentum in December.”
At the same time, he warned of rising inflationary pressures across the region.
Data from the Philippine Statistics Authority, which will report November inflation data today, show overall price increases picking up since August, though some analysts expect last month to have seen a slight slowdown.
“Rising global prices for raw materials may have benefitted commodity-producing countries within ASEAN, but it also meant that firms faced higher input prices,” Mr. Aw said.
“In many cases, companies were unable to fully pass on the rise in costs to their clients through higher selling prices, suggesting an ongoing squeeze on profit margins,” he added.
“With… ASEAN manufacturing… showing no sign of capacity strains, tighter margins could weigh on staff hiring in the coming months.” — E. J. C. Tubayan
Central banks’ post-crisis bubble tool does the job
SINGAPORE — Central bankers are starting to see promising results from one of the recent additions to their monetary policy toolbox.
Lending curbs to stem financial risk — so-called macroprudential limits — have helped slow risky borrowing and temper property price bubbles in countries from New Zealand to Canada, a host of financial stability reports showed last week. While there hasn’t been uniform success — Hong Kong’s housing market shows no signs of cooling — it’s given central banks some breathing space to be more gradual in tightening monetary policy.
“If you think about lessons from the global financial crisis, macroprudential is one of the key lessons,” said Steven Bell, chief economist at BMO Global Asset Management in London.
“It was a tool of counter-cyclical credit tightening, and I think that’s going to be a permanent feature.”
Asia-Pacific nations have recently been among the boldest in trying to curb the effects of ultra-easy monetary policies. In New Zealand, where tighter mortgage lending rules helped to curb soaring property costs, the central bank is now ready to reverse restrictions from Jan. 1, acting Governor Grant Spencer said Wednesday, adding that price pressures will continue to moderate.
Macroprudential tools came of age in the aftermath of the financial crisis as central banks turned to them to cool markets without bludgeoning them and hurting overall economic growth with the blunt instrument of interest rates. The hope is, if successful, rates can be kept lower for longer to support the economy.
Australia’s measures are biting, with a housing boom all but over as property prices in Sydney decline. The Reserve Bank of Australia sees tightening lending standards as necessary medicine that’s already making the balance sheets of banks and borrowers healthier, although a record debt overhang for households remains a worry.
Risks in the housing market “have not gone away, but the fact that they are not building at the rate they have been is a positive development,” Reserve Bank of Australia Governor Philip Lowe said in a Nov. 21 speech.
China is set to see the first decline in home sales since 2014, owing to interventions over the past year-and-a-half to cool the property market, including tighter down-payment requirements and restricting non-resident buyers.
Officials are keeping up the enhanced rules, betting that they will help ensure the world’s No. 2 economy can manage a controlled cooling without triggering a growth slump.
In Southeast Asia, Singapore earlier this year tweaked some property curbs that were meant to cool the market, helping reverse a housing slump. The Monetary Authority of Singapore, in its financial stability report released Thursday, said enhanced post-crisis restrictions on banks in South Korea and Hong Kong — such as limits on cross-currency swaps — helped reduce vulnerabilities in the region.
Lending curbs have also won the backing of the Bank for International Settlements, which found in a September report that among 64 advanced and emerging economies, those that more frequently use the tools typically enjoy stronger and less volatile growth.
The European Central Bank is doubling down on such measures, finding them especially handy to tackle the nuances of member economies. Germany’s Bundesbank said in its Nov. 28 financial stability review that even — and perhaps especially — in good times, central bankers should consider using the tools to curb complacency.
“Owing to the prolonged period of sound economic development in Germany, the perception of risk in many quarters might be too positive at present,” the Bundesbank said.
Germany already took action earlier this year to grant BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht or the Federal Financial Supervisory Authority), its market regulator, the power to cap borrowers’ loan-to-value income ratios to limit defaults amid soaring property prices.
The Bank of Canada is expressing a similar sentiment: property-market overheating and financial stability risks are being curbed amid higher mortgage rates and policy measures. Fewer highly indebted households are able to qualify for loans, ensuring the system will continue to build resiliency, the central bank projects.
Global policy makers aren’t off the hook yet. Stricter financing rules may have curbed excesses, but household debt remains high in many countries, say analysts at Citigroup, Inc. The Swedish Financial Supervisory Authority said in its financial stability report Wednesday that housing and debt risks are still elevated, even though capital and lending requirements for banks have been raised for years in order to stem risk.
Macroprudential measures also have their limitations, according to economists at Fitch Ratings Ltd.
“We don’t see that it can really be an effective substitute for monetary policy tightening,” Robert Sierra, a London-based economist at Fitch, said in an e-mail. “Restricting lending through macro-pru, while still maintaining extremely low interest rates, risks sending conflicting signals. At the end of the day it’s only interest rate increases that can really get into all the cracks.” — Bloomberg
Peso weakens on US tax reform
THE PESO traded weaker against the dollar on Monday on the back of the passage of the US tax plan.
The local unit finished at P50.665 against the greenback on Monday, weaker by 29.5 centavos than its P50.37-per-dollar close on Friday.
The peso opened slightly weaker at P50.40, which was also its best showing for the day. The peso’s intraday low, meanwhile, stood at P50.67 against the greenback.
Dollars traded surged to $723.4 million yesterday from the $444.7-million volume logged the previous session.
Traders cited the passage of the tax cut bill in the US Senate as the main driver for the strengthening of the greenback.
“The dollar traded higher…due to the tax reform. The Senate voted for the implementation of the tax plan,” a trader said over the phone.
Over the weekend, Senate Republicans approved the bill with a narrow 51-49 result. The proposal slashes corporate taxes to 20% from the current 35%.
The Senate deal moves Republicans and President Donald J. Trump a big step closer to their goal of slashing taxes in what would be the largest change to US taxation since the 1980s.
Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, noted that investors weighed the positive impact of the corporate tax change.
Mr. Asuncion added that upbeat sentiment on the US tax plan overshadowed the investigation into the connection of then US presidential candidate Mr. Trump and Russia.
Last week, former national security adviser Michael T. Flynn said he was willing to testify regarding Mr. Trump’s connection in the alleged Russian meddling on the 2016 elections.
Meanwhile, another trader pointed out that some players took profits due to the peso’s rally in the past trading days.
“We’ve been seeing a significant improvement in the peso lately so given the move today, we saw a squeeze and thus we saw the dollar-peso to trade near the [intraday low],” the trader said.
For today, traders are expecting the peso to move between P50.50 and P50.80, while Mr. Asuncion gave a wider range of P50.50 to P51 as he noted that the tax cut passage would be [Mr. Trump’s] first potential legislative victory since coming into office.
“With this move, we’re going to see consolidation as I think more players would want to wait and see whether [the dollar ascent] is going to [continue or be reversed],” the second trader concluded.
Meanwhile, most Asian currencies also weakened on Monday with the dollar getting a lift from the US Senate’s approval of a tax overhaul plan at the weekend.
“I expect finally the tax reform will be passed and signed into law so in January we will see some modest gains in the dollar versus emerging Asian currencies,” said Gao Qi, Asia FX strategist at Scotiabank.
The dollar index, which measures the greenback against a basket of six major currencies, rose about 0.31% to 93.174 at 0644 GMT.
The Singapore dollar and the Thai baht weakened 0.19% and 0.12%, respectively
The Taiwan dollar traded flat ahead of Tuesday’s consumer price inflation numbers, expected to be 0.26%.
Malaysia’s ringgit firmed 0.36% on Monday, the most in the region, as November factory data showed the strongest expansion in the manufacturing sector since April 2014, thanks to solid growth in output and new orders on improved domestic and overseas demand.
The yuan firmed 0.08% even though the People’s Bank of China set a weaker fixing rate for the second consecutive day. The currency eased against the greenback on Friday and ended the week lower.
The Indian rupee firmed 0.12%. The Reserve Bank of India is due to hold monetary policy committee meeting on Wednesday.
Data issued on Friday showed India’s foreign exchange reserves crossed the $400 billion mark on Nov. 24, the highest since Sept. 22.
INDONESIAN RUPIAH
Indonesia’s rupiah traded flat as data for November showed inflation reached its lowest since December 2016 at 3.30% year on year, lower than expectations of 3.40% from a Reuters poll of analysts.
Core inflation for the same period also came in lower than expected, at 3.05%, against the expected 3.10%, lowering the potential for a rate hike.
S. KOREAN WON
The Korean won was the region’s second-biggest loser, weakening 0.21% against the greenback.
The Bank of Korea hiked the benchmark rate on Nov. 30, as was widely expected, for the first time in six years. — Karl Angelo N. Vidal with Reuters
Lopez-Consunji venture bags P22.6-B Cebu project
A CONSORTIUM COMPOSED of the Lopez and Consunji groups and Spain’s Acciona Construccion S.A. has bagged the P22.6-billion contract to build and design the Cebu-Cordova Link Expressway (CCLEx), the Metro Pacific group’s first tollway project in the Visayas.
In a statement on Monday, Cebu Cordova Link Expressway Corporation (CCLEC) said the Cebu Link Joint Venture (CLJV) was issued a notice of award for the “design and build” contract for the bridge that will connect Cebu City to Cordova in Mactan island.
“(CCLEC) issued the Notice of Award to CLJV on Nov. 23, 2017 at an agreed contract amount of P22.6 billion,” the subsidiary of Metro Pacific Tollways Corp. (MPTC) said.
CLJV is the joint venture company of Acciona, D.M.Consunji, Inc. and Lopez-led First Balfour, Inc., which CCLEC said all have “proven track records in major infrastructure projects.”
“We are delighted to be part of this landmark project. We have put together a very experienced team, and are looking forward to working closely together with the customer to deliver a new toll bridge that will benefit both local communities and the Philippines,” Acciona Director of Singapore and Southeast Asia Ruben Camba was quoted as saying in a statement.
Under a joint venture agreement with the local governments of Cebu City and Cordova Municipality, CCLEC will build, operate and maintain the 8.5-kilometer toll bridge.
“We are very confident that we can deliver a quality state-of-the-art bridge that will provide not just travel efficiency but also drive economic growth and productivity in the entire Visayas region, and improve the overall welfare of the Cebuanos,” CCLEC President and General Manager Allan Alfon was quoted as saying in a statement.
President Rodrigo R. Duterte led the groundbreaking ceremony for the project in Cordova, Cebu in March.
CCLEx will have two lanes in each direction. It will have a main navigation span bridge, as well as viaduct approach bridges, a causeway, roadway, and toll facilities.
The toll bridge is expected to serve at least 40,000 vehicles and help decongest traffic in the two existing bridges between Mactan and Cebu.
“We are happy to be given this opportunity to bring to Cebu and share with the Cebuanos and the people in the Visayas in general, our company’s expertise in building and operating world-class highways and bridges to create more opportunities and spur economic growth,” MPTC President and CEO Rodrigo E. Franco said.
The CCLEX is the first tollway project of Metro Pacific group in the Visayas and Mindanao areas, as it expands its tollway presence around the country.
It currently operates the North Luzon Expressway (NLEx), Subic-Clark-Tarlac Expressway (SCTEx) and the Manila-Cavite Expressway, and is currently constructing the Cavite-Laguna Expressway (CALAX).
Last month, MPTC announced it has increased its stake in Indonesian firm Nusantara Infrastructure, further expanding its presence in Southeast Asia.
Mr. Franco earlier said MPTC will be raising about P50 billion from bank loans next year to finance major toll road projects, including the CCLEx, as well as the CALAX, NLEx-SLEx Connector Road, and C-5 Link Expressway.
MPIC is one of the three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo
Confusion reigns as banks scramble to price FX; bond research under revamp
LONDON — How much are you worth? For the foreign exchange (FX) and bond analysts covering the world’s biggest markets, how much to charge for their time and research remains in question just a month away from sweeping new rules that require fund managers to pay for these services.
Forcing funds pay separately for research is one element of the wide-ranging European Union financial markets directive known as “MiFID II,” which is aimed at making European markets more transparent and providing better value for investors. Its complexity has already delayed its implementation by a year.
Having grappled with the issue for the past 18 months, no consensus or preferred pricing model appears to have emerged on macroeconomic, fixed income and foreign exchange research, taking discussions down to the wire.
At least 11 banks Reuters spoke to said they would be charging for investment research and meetings with analysts when the MiFID II comes into force on Jan. 3.
There was a reluctance to talk about charges but several sources said pricing of fixed income research was aimed low, many said pricing details had not yet been finalized and some said certain elements of research — mostly macroeconomic — would be free via online portals.
“While we’re currently discussing with clients, we’ve not gone public on anything yet,” said a source at an international bank with operations in London, declining to be named.
“I‘m hearing from everyone at other banks that pricing isn’t yet fixed. Someone else told me that they didn’t think things would be finalized until March.”
Because banks use research to attract clients, the fallout of MiFID II across asset classes is being watched closely.
But working out prices for forex and fixed income research has proved complex, analysts said. They added it was hard to assess the impact since a large chunk of clients such as central banks, sovereign wealth funds and certain pension funds will not have to pay under the new rules.
There were also some concerns about the implications for the thousands of analyst jobs in a banking sector already squeezed by the financial crisis and regulation.
The number of analysts at the 12 biggest banks has fallen by 10% since 2012 to 5,981 in 2016, according to data provider Coalition.
There are also numerous reports of equity analysts moving to independent research shops, investments firms or considering new careers as MiFID II looms.
BCA, an independent investment research firm, estimates that roughly $16 billion annually is spent on global investment research — a number that is expected to shrink in coming years.
Compliance demands meanwhile are keeping traders, trading desk heads and analysts away from clients, which hurts the profitability of the desk.
Peter Chatwell, senior rate strategist at Mizuho in London, said at least one or two days of his week are allocated to MiFID II.
“I am spending a vast amount of time agreeing prices for research contracts, working on our new research portal and working out how to swiftly onboard the new clients we are acquiring,” he said.
“This is far bigger than Y2K, because this is not a one-off IT fix but a structural change in how research is used and funded within financial markets,” Chatwell said, referring to preparations to deal with computer issues around the change in date before the year 2000.
According to Greenwich Associates, 94% of the 46 sell-side fixed-income traders taking part in a recent study said they are spending more time speaking with compliance.
The key question meanwhile for asset managers required to pay for research under MiFID II is whether to pass on or absorb that cost.
GOING LOW
Pricing of fixed income, currency and commodity (FICC) research was expected to be generally lower than for equities.
The median expected cost of equity research is 10 basis points (bp) — equating to €1 million per year for a firm with €1 billion under management, according to the CFA Institute. The median cost for FICC research was 3.5 bps.
That may be caused by a view that such research is free, because until now it has been bundled into the dealing spread, said Rhodri Preece, head of capital markets policy for EMEA at the CFA.
“Perhaps there’s an opportunity (for banks) to recoup some of the losses (from buy-side shifting away from their equity research) through charging for fixed income,” he said.
One source at a European bank, who declined to be named, said the pricing of research would be a “reality check,” while two bond analysts said clients had told them that they were pricing their research too low.
“The fees being talked about in the market at the moment are pretty negligible, about enough to pay for delivering the invoice,” said another banking source, declining to be named.
One source with knowledge of the matter said JP Morgan would charge $10,000 a year for electronic access to published reports only, which would not include analyst time or greater engagement with the research department. A spokesperson for JP Morgan declined to comment.
A source at another bank who asked not to be named said the annual cost of macro-economic research was set at around $15,000 which includes access to analysts.
British bank NatWest says on its website it will provide written material for free on its Agile Markets platform and charge an annual subscription of £2,000 ($2,656) to access strategists.
Credit Suisse said it intended to make written macroeconomic and fixed income product desk strategy available to investment firms through its online platform.
Others questioned the model of providing free research under the new rules and expected regulators to give further clarity.
“The idea that some firms are going to give away stuff for nothing or very little goes counter to the point of what the regulation is trying to achieve, which is trying to stop inducements,” said one London-based analyst. — Reuters
8990 allocates P3 billion for capital expenditures
By Arra B. Francia, Reporter
MASS HOUSING developer 8990 Holdings, Inc. will allocate P3 billion in capital expenditures next year to support the construction of its projects as well as the acquisition of land properties.
“We’re looking at P3 billion (for the whole 2018),” 8990 Chief Operating Officer Willibaldo J. Uy told reporters in Makati City on Monday.
This is 50% higher than the P2 billion the company has allocated for projects in 2017.
8990 Chief Financial Officer Roan Buenaventura-Torregoza said the funds will primarily be used for the construction of projects and land acquisitions.
“Mostly for the construction of high-rise. Pero on landbanking, we’ve just replenished yung land bank namin. Because our land bank strategy is 500 hectares at any given point in time. So replenishment,” Ms. Torregoza said.
At the same time, 8990 will be launching five projects worth P60 billion in sales. These will be spread out in Cebu, Iloilo, Ortigas, and Davao with two projects lined up.
The company added that more projects may be launched next year depending on the processing of permits from regulators.
“It’s more driven by how fast the permits can come out. Because now it’s quite long, although it’s more predictable now, it’s hard to say,” Mr. Uy said.
Mr. Uy noted they will start selling units at its Ortigas project by the first quarter of 2018, as soon as the company secures the license to sell from the Housing and Land Use Regulatory Board (HLURB). So far, the company has signed a contract to construct six buildings within the area.
“We can start selling already. Very strict lang talaga sila sa HLURB we just want to make sure that we have everything in place before we start accepting reservations,” Mr. Uy said.
The 8990 executive said the project will be similar in size to its Tondo development, where the company is currently constructing 13 residential buildings offering 13,212 condominium units and 2,226 parking lots.
The Ortigas project will also have a mall, which will begin construction in late 2018, as the company looks to take advantage of the market once residents start moving in the condominium.
“Because of the size of the community there. Kasi captive market, sayang naman. Rather than them going out, they’d just stay inside the mall,” Mr. Uy said.
Mr. Uy added they see potential mall developments complementing their housing projects.
“This is something we can’t wait to get into. As long as it can serve our market that’s big enough,” he said, adding the project may be replicated in other vertical developments with more than 10 buildings.
In this setup, 8990 will be leasing out the land to its sister company called Yuma, which will then handle the retail component.
8990 booked a 22% decline in attributable profit for the first nine months of 2017 to P2.47 billion, weighed down by delays in processing of permits.
Shares in 8990 added eight centavos or 1.44% to close at P5.63 apiece at the stock exchange on Monday.
Manufacturer disputes claim of deaths due to vaccine
By Arra B. Francia
Reporter
FRENCH PHARMACEUTICAL company Sanofi Pasteur on Monday, Dec. 4, dispelled reports that three patients who received the dengue vaccine last year supposedly died because of the shot, saying the vaccine itself cannot trigger the infection.
“We try to correct this misinformation…hindi dapat tayo nag-ko-conclude on these things (we’re not supposed to make conclusions on these things). There is an independent expert committee that decides on these matters. And as of today, what we know is that it’s judged, not related to the vaccination,” Sanofi Medical Director Ruby Dizon said at a press briefing in Taguig City.
This is in connection with a claim by the Volunteers Against Crime and Corruption (VACC) that the Dengvaxia vaccine had caused the deaths of three children, after they took part in the P3.5-billion vaccination program of the Department of Health (DoH) using drugs licensed under Sanofi in April 2016.
“May na-receive na kami sa aming coordinator sa Central Luzon, tatlo na po ang namatay doon. Ang mga bata na tinurukan noong Abril 2016,” VACC chairman Dante Jimenez said in a separate press conference in Manila yesterday. (According to our coordinator in Central Luzon, three have died, children who had been inoculated.)
A prominent senator, Richard J. Gordon, told Reuters he was aware of two deaths — but gave no details — and said approval and procurement for the program was done with “undue haste.”
For his part, Presidential Spokesperson Harry L. Roque, Jr. said there had been no reported case of “severe dengue infection” since the vaccine was administered and urged the public “not to spread information that may cause undue alarm.”
An official of the DoH also said the deaths were not due to Dengvaxia.
Prior to VACC’s statements, the DoH already ordered the suspension of the vaccination program following a new study by Sanofi itself stating that the Dengvazia vaccine may cause severe dengue cases on patients who were inoculated but did not have a prior infection.
A total of 733,713 children aged nine years and above from Regions 3 (Central Luzon), 4-A (Calabarzon), and the National Capital Region received the vaccine last year. Of this number, the DoH said around 90% already had dengue beforehand, which means the remaining 70,000 face increased risks of getting the infection, going by Sanofi’s disclosure itself.
The World Health Organization (WHO) said in a July 2016 research paper that “vaccination may be ineffective or may theoretically even increase the future risk of hospitalized or severe dengue illness in those who are seronegative at the time of first vaccination regardless of age.”
Sanofi Global Medical Head Ng Su Peing said at Monday’s press briefing: “We noted in the longer term an increased risk of hospitalized and severe dengue in the vaccinated people without a prior dengue infection history compared to the placebo.”
The company defined severe dengue to have the following symptoms: easy bruising, bleeding from nose and gums, low blood pressure, and profound shock.
On the other hand, the company said the vaccine retains its efficacy once the patient has received all three shots.
“With the three vaccine doses, majority of the people are protected. Whether you knew their infection status or not. Majority of people have fewer dengue cases, fewer hospitalizations with severe dengue,” Ms. Peing said.
When asked about precautionary steps that should be taken by those who received the vaccine but did not get the infection beforehand, Ms. Dizon said there are none as of the moment.
Should these patients get dengue, however, they should still practice the same measures as if they did not receive the vaccine. “So when your child has a fever, whether vaccinated…or not you still do the same thing…symptoms leading to dengue, you still bring the child to the doctors, it doesn’t really impact the management,” Ms. Dizon explained.
The company said it is coordinating with the DoH and the Food and Drug Administration (FDA) on how to move forward with the case.
“Our focus today is to communicate these results as proactively and as actively as we can to the FDA, to our Department of Health…to make sure that the mechanisms are in place. And we will decide how to move forward with the DoH,” Ms. Dizon said.
Meanwhile, the Department of Justice (DoJ) on Monday ordered the National Bureau of Investigation to look into “the alleged danger to public health … and if evidence so warrants, to file appropriate charges thereon.”
For her part, former Health secretary Janette Garin, who implemented the program under the administration of then-president Benigno S.C. Aquino III, said she welcomed the investigation.
“In the event that there will be authorities who will point culpability to me, I am ready to face the consequences,” she told ANC TV. “We implemented it in accordance with WHO guidance and recommendations.” — additional report by Reuters
Aboitiz unit temporarily shutters biomass power plant in Batangas
ABOITIZ POWER Corp. (AboitizPower) said its unit Aseagas Corp.’s 8.8-megawatt (MW) biomass power plant in Lian, Batangas will remain shuttered, as the company assesses its options.
In a disclosure to the stock exchange, AboitizPower said the Aseagas plant had earlier halted operations on Nov. 24 due to the unavailability of organic effluent wastewater.
“After evaluating the circumstances and the ongoing technical problems relating to the plant’s fuel stock and digester components, Aseagas decided to maintain the shutdown and to determine the appropriate way forward,” it told the stock exchange on Monday.
The supply of organic effluent wastewater was supposed to come from Absolut Distillers, Inc. The plant converts the organic effluent of Absolut into clean and renewable energy. It is meant to power about 22,000 households while producing 33 tons per day of liquid carbon dioxide for the industrial and beverage industries.
“This continued shutdown will allow us to look at our options, taking into consideration the interests of all our stakeholders,” AboitizPower President and COO Antonio R. Moraza said in a separate statement.
At the same time, Aseagas said it has prepaid an outstanding P2.368-billion loan with the Development Bank of the Philippines (DBP).
Aside from the DBP loan, Aseagas also invested equity of around P950 million for the biomass plant and has around P460 million in outstanding liabilities.
AboitizPower acquired the biomass plant in July last year, adding to its portfolio of renewable energy projects. The deal was through Aboitiz Renewables, Inc., the listed company’s holding firm that houses its investments in renewable energy. AboitizPower acquired the Aseagas facility from parent firm Aboitiz Equity Ventures, Inc.
The biomass power plant was expected to start operating and delivering power to the Luzon grid before October 2016. It built up AboitizPower’s renewable energy footprint, which currently covers large hydro, run-of-river hydro, geothermal and solar.
“Despite these challenges, our other projects are progressing as planned. About 500 MW of attributable capacity, mainly from baseload and hydro power plants, will come online in 2018. We are on track to meeting our 4,000-MW net attributable capacity target by 2020,” Mr. Moraza said.
On Monday, shares in AboitizPower closed higher by 0.39% at P38.65 each. — Victor V. Saulon